Chancellor Doubles Down on Infrastructure & ‘Green Jobs’ in Summer Budget Announcement

Chancellor Rishi Sunak has just announced a new economic plan to kickstart financial recovery in the UK.

Amongst historic temporary VAT cuts on food and accommodation from 20% to 5%, as well as a £2bn job creation scheme, Mr Sunak outlined the importance of infrastructure, particularly housing, as a key player in the country’s economic upturn, with house building supposedly supporting over 750,000 jobs.

Citing a 50% decrease in property transactions in May, the Chancellor stated that people needed to feel confident to “buy, sell, renovate, move, and improve” in order to drive growth and create jobs.

To this, he announced his previously rumoured stamp duty holiday scheme which will suspend the cost of the tax paid on homes up to £500,000, potentially saving many house buyers thousands and incentivising buying in order to stimulate the housing market until the scheme stops running on 31 March 2021.

To translate this scheme into numbers, Mr Sunak explained: “The average stamp duty bill will fall by £4,500, and nearly nine out of 10 people buying a main home this year will pay no stamp duty at all.”

However, there have been some concerns about the disruption this announcement may cause. Although the Chancellor assured the changes would take place immediately, some estate agents are concerned that the announcement
will delay those currently buying a home from proceeding further so they can take advantage of the discount.

There are also criticisms that, whilst this will help create a short-term boost to the economy, more future-proofed plans should be considered alongside this in order to secure long-term growth back into the housing market as well as the whole UK economy.

In the spirit of the Prime Minister’s ‘levelling up’ approach, a large focus was placed on infrastructure.  And whilst the creation and retention of jobs was a key factor, the focus for this seemed to lay in the environmental implications of construction, stating that “this is going to be a green recovery with concern for our environment at its heart.”

Under this, £1bn was pledged in order to improve the energy efficiency of public sector buildings, as well as £50m fund to “pilot the right approach to decarbonise social housing”.

A £2bn ‘Green Homes Grant’ was also announced, meaning that from September, homeowners and landlords can apply for vouchers to make their homes more energy efficient.

Through this grant, families can receive up to £5,000 (equivalent to two-thirds of such costs) for energy-saving changes to their homes such as eco-friendly boilers, doors, and lighting; with lower income families receiving discounts of up to 10,000. Mr Sunak expects these measures to make over 650,000 homes more energy efficient and save them £300 pounds a year on energy bills. He also expects a carbon cut of half a megaton per year, and 140,000 ‘green jobs’ to be supported.